TRACKING FINANCIAL CAPABILITY

Build Your Logic Model

JANUARY 2015

Build Your Logic Model

Monitoring Financial CapabilityCorporation for Enterprise Development 2Tracking Financial Capability 2

AUTHORSPamela Chan, Parker Cohen, Kori Hattemer, Emily Hoagland and Elizabeth McGuinness

ABOUT CFED

CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people.

Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.

ABOUT BANK OF AMERICA CORPORATE SOCIAL RESPONSIBILITY

We have a clear purpose to help make financial lives better for those we serve. Our corporate social responsibility (CSR) efforts are a demonstration of how we live our purpose, and play a key role in our business strategy of responsible growth. These efforts guide how we operate in a socially, economically, financially and environmentally responsible way around the world, to deliver for shareholders, customers, clients and employees. One area of focus is the role we play to enable and promote financial empowerment, helping individuals and communities to thrive. We do this through the products we create, the education and resources we provide broadly to consumers, and the more personalized, hands-on opportunities we help enable through partnerships in our local communities. Through our partnership with non-profit online education innovator Khan Academy, we provide BetterMoneyHabits.com, a free education resource aimed at empowering people to be more confident in their financial decision making. The program pairs Khan Academy’s expertise in online learning with our financial know-how to deliver unbiased and easy-to-understand information on a wide range of personal finance topics including budgeting, savings and credit. Learn more at bankofamerica.com/about and BetterMoneyHabits.com.

Build Your Logic Model

Monitoring Financial CapabilityCorporation for Enterprise Development 3Tracking Financial Capability 3

A logic model is the foundation for a results-focused program. It should be at the core of program planning as well as tracking. Logic models are visual tools that tell the story of your entire financial capability program—how you use resources to implement a program and how that program helps your clients achieve financial security. Logic models can be read as a series of “if…then” statements. It illustrates a chain of reasoning that links investments to results. Used in project planning, logic models allow staff and stakeholders to keep the program’s long-term goals in focus, identify the appropriate resources and activities required to help fulfill those goals, and uncover uncertain assumptions that could jeopardize the program’s success.

A well-designed logic model can provide the foundation to support your efforts to collect the data necessary to answer important questions about the performance of the program. A logic model can be developed and formatted in many ways. In this document, we are not prescribing the “best way” to create a logic model. Rather, we are offering you an approach we have adopted based on our experiences. We organized this guide into 3 sections:

1 Building Out Your Logic Model: Program Process

2 Building Out Your Logic Model: Program Outcomes

3 Using Your Logic Model to Support Program Planning

Financial capability programs aim to change the lives of their participants and improve the financial health of the larger community. A logic model is a tool that can help you plan your financial capability program and decide how to monitor progress, evaluate results and communicate about your program clearly and succinctly to your funders and stakeholders.

This guide is the second in a three-part series, Tracking Financial Capability:

Guide #1: Identify and Prioritize Your Expected OutcomesGuide #2: Build Your Logic ModelGuide #3: Select and Collect Indicator Data

This series is designed for frontline organizations that plan to provide, or are already providing, services to help clients manage their financial resources more effectively and become more financially secure. The three guides in this series will help you establish processes to track your programs to ensure they are being implemented as planned and resulting in the outcomes you set out to achieve. These guides will help you clearly state up front what you hope to achieve as a result of these services, how you plan to bring about these changes in your clients’ lives (as depicted in your logic model), and how you will collect data to track your progress.

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Figure 1 on Page 2 provides a logic model template with a description of each component for you to follow. You can use this template to construct your own program logic model. The Appendix provides a sample logic model for a financial coaching program that we adapted to illustrate a complete logic model.

1. Building Out Your Logic Model: Program Process

GOAL: This is your vision for the future, what you are trying to achieve over the life of your intervention and the solution to the problem articulated in your situation statement.

SITUATION: This is a clear articulation of the problem or issue you are trying to solve for the people your program is serving or will serve.

Program Process (What You Do) Program Outcomes (Desired Effects on Participants)

Inputs Activities OutputsShort-termOutcomes

Medium-termOutcomes

Long-termOutcomes

What we invest into the program

What we do in the program

The direct products of performing the activities and who is reached

The measurable results we hope to see among those we serve in a short timeframe

The measurable results we hope to see among those we serve in a medium timeframe

The measurable results we hope to see among those we serve in a longer timeframe

ASSUMPTIONS EXTERNAL FACTORS

• The beliefs we have about the program, the people involved and how we think change will occur

• The theory behind the program or underlying beliefs about how and why it will work

• The conditions for success

• The factors that might influence your ability to do the work you planned

• The factors that might influence change in your participants and community

• Any potential barriers to achieving the change you desire

FIGURE 1: Logic Model Template

The first part of a logic model relates to your program’s implementation or process, including your program inputs, activities and outputs. It describes the observable characteristics of your program and demonstrates their relationship to each other.

� Inputs are the resources available to the organization to create and implement the program. Inputs include funding, staff, equipment, etc.

� Activities are what the program does in order to achieve its desired outcomes. � Outputs are the direct and tangible products of these activities. Thus, an activity could be a

financial education class, while its outputs are the number of classes taught and the number of people who attend each class.

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People often confuse outputs and outcomes. Outputs are:

� The direct evidence of having performed program activities.

� Measurements of service delivery, not program impact.

Outputs are NOT:

� Measurements of program impact. � Able to tell you whether the program actually changed the lives of the people served.

For example, in a financial coaching program, output measures could be how many times clients show up for appointments and their satisfaction with the services, while outcomes could be changes in clients’ credit scores.

Measuring outputs is critical to evaluate the performance of your program. Output measures are often used to report whether or not your program is on track to meet your expected outcomes. Ultimately, successfully implementing and effectively tracking your outputs is key to understanding how your program is touching your clients’ lives. This is useful for interpreting your findings when you assess program outcomes.

Outcomes are the desired impact on targeted clients’ well-being resulting from successfully implementing the program activities. If you have not yet started to think about the outcomes that result from your program, you may want to refer to the first guide in this series, Identify and Prioritize Your Expected Outcomes.

The timeline for when outcomes occur varies by type of outcome. Some outcomes might be evident during or immediately after service delivery, while other outcomes will not be measurable until months or years after someone participates in an activity or program. Some outcomes depend on others occurring first. How an organization determines whether an outcome is short- or long-term will depend on service delivery and the specific outcomes expected for the target population. It is helpful for you to differentiate

Output measures are often used to report whether or not your program is on track to meet your expected outcomes.

2. Building Out Your Logic Model: Program Outcomes

TIPS: Distinguishing Outcomes from Outputs

DDOutputs relate to what the program does. Outcomes relate to what difference the program makes.

DDMeasuring outputs often involves counting (e.g., number of students taught, number of students completing a budgeting exercise, etc.).

DDOutcomes always refer to characteristics that in principle could be observed for individuals or situations that have not received program services. Program outputs are only experienced by program participants (e.g., increased balance in savings account, increased trust in financial institutions, etc.).

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between short-term, medium-term and long-term outcomes so you can anticipate when changes will occur and should be measured.

� Short-term outcomes are those that occur during or immediately after program delivery. They are sometimes referred to as “take-away” outcomes as the participant should take these with them when they leave the program.

� Medium-term outcomes (or intermediate outcomes) are those outcomes that occur after the short-term outcomes and that link short-term outcomes to long-term outcomes.

� Long-term outcomes are the results that you hope your program will achieve.

It’s helpful to think about which outcomes you are most likely to see first. Then, ask yourself, “What happens next?” Then, “What happens after that?” Going through this series of questions will allow you to break out short-term, medium-term and long-term outcomes and to understand the relationships between them.

As a rule of thumb, changes in knowledge, skills and attitudes are considered the easiest to achieve in the short term. Changes in habits and decision-making occur once changes in knowledge, skills and attitudes are internalized by individuals. This takes time.1 These outcomes are usually categorized as medium-term outcomes. Changes in status or life condition, such as household financial security, typically take the longest to achieve because they result from changes in behavior, and they are often considered long-term outcomes. For example, for a financial coaching program, a short-term outcome could be changes in a client’s understanding of the importance of their credit score. This would ideally cause them to develop a habit of checking their own credit reports and creating a debt management plan—two medium-term outcomes. Eventually, this might cause the client to see an increase in their credit score—a long-term outcome that results from the new behaviors. Table 1 provides a general guide to outcomes categorized according to the sequence in which they happen.

A sample logic model for a financial coaching program is shown in Figure 2 in the Appendix, illustrating both program process and program outcomes, as well as distinguishing between short-, medium- and long-term outcomes.

TABLE 1: Short-, Medium- and Long-term Outcomes

SHORT TERMWhat the short-term results are

MEDIUM TERMWhat the medium-term results are

LONG TERMWhat the ultimate impact is

LEARNING ACTION CONDITIONS

AwarenessKnowledgeAttitudes

SkillsOpinions

AspirationsMotivations

BehaviorHabits

PracticesDecision-making

PoliciesSocial Action

SocialEconomicFinancial

Environmental

1 Donald L. Kirkpatrick and James D. Kirkpatrick, Evaluating Training Programs: The Four Levels, Third Edition (San Francisco: Berrett-Koehler Publishers, Inc., 2006), 85. See also A Longitudinal Evaluation of the Intermediate-term Impact of the Money Smart Financial Education Curriculum Upon Consumers’ Behavior and Confidence (Washington, DC: FDIC, 2007).

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3. Using Your Logic Model to Support Program Planning

We have just described and compared the core elements of the logic model. Now we are going to address the four additional components included in the logic model template in Figure 1 on page 4. These components are helpful for communicating the goal of your program, the problem you are trying to solve, your assumptions about how your program will work and the aspects of the external environment that will promote or hinder program success. This information is useful for guiding program planning, as well as for communicating your program and the rationale behind it to funders. See Figure 2 in the Appendix for an example.

� Goal: This is your vision for the future; it is what you are trying to achieve over the life of your intervention. It is the solution to the problem you articulate in the Situation statement.

� For example: To increase financial security for low-income families in Essex County through building financial capability.

� Situation: This is a clear articulation of the problem you are trying to solve for the target population. It should answer the following questions: What is the problem? Why is it a problem? For whom is it a problem?

� For example: Low-income families are spending too much on high-cost debt that is reducing household consumption and preventing families from saving for the future.

� Assumptions: These are the beliefs you have about your program, the people involved and how you think change will occur. They are the theory behind the program. Documenting the assumptions behind a program and behind the logic model is a good way to make implicit assumptions explicit. This can serve to ensure that all staff and stakeholders have a common understanding of how your program will work.

� For example: By providing an engaging financial capability program that teaches appropriate knowledge and skills and promotes proactive attitudes, our clients will adopt positive financial management behaviors that will result in decreased debt and higher household savings.

� External Factors: These are factors that might influence your ability to do the work that you planned. These factors could be barriers to impacting the change you desire.

� For example:

▪ In emergencies, low-income households can only borrow from high-cost, short-term lenders.

▪ Proposed state legislation will soon cap interest rates charged by high-cost, short-term lenders.

▪ A lack of public transportation in our city will make it difficult for some people to access the financial coaching sessions.

Stating your program’s implicit assumptions and laying out the external factors that may affect your program implementation is an important step, but you will need to re-visit these as the program or situation changes to make sure they remain relevant. Situational changes in the program environment sometimes require that you reexamine and possibly change multiple aspects of your logic model and program design.

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The next step is to select indicators and collect data to track your program’s performance. In the third guide in this series, Select and Collect Indicator Data, we will show you how to take your logic model and turn it into a rich set of data that can be used to assess how you are doing with your program, determine whether or not you need to refine your program, communicate your program’s potential and lay the foundation for a formal impact evaluation.

If you have not yet identified and selected your program outcomes, see the first guide in this series, Identify and Prioritize Your Expected Outcomes. This guide will assist you to:

� Understand what financial capability outcomes are.

� Identify desired financial capability outcomes for your clients.

� Prioritize financial capability outcomes to track.

Looking Ahead: Select and Collect Indicator Data

Additional Resources

To learn more about logic models and about tracking financial capability in general, the following resources are helpful guides:

� Handling Data: From Logic Model to Final Report by Gail V. Barrington.

� Evaluation: A Systematic Approach by Peter H. Rossi, Mark W. Lipsey and Howard E. Freeman.

� Enhancing Program Performance with Logic Models, University of Wisconsin-Extension. � Finding a Yardstick: Field Testing Outcome Measures for Community-based Financial Coaching

and Capability Programs by J. Michael Collins.

� Measuring Outcomes of Financial Capability Programs: Success Measures Tools for Practitioners, NeighborWorks America.

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